The Right and Smart Way Of Buying A New Car
For those of you looking to buy a new car, there is a smart and right way of doing it, and there is a dumb way of doing it. No doubt cars are essential for travel. While not everyone will own a car in their life, some cannot wait to get their hands on the new Ford Focus.
But we’re here to tell you how to do just that without paying too much. Since car prices are up by 17% compared to last year, let’s see what you can do to save yourself thousands of dollars in the process.
Before you even think about buying a new car, you should get preapproved for a car loan. You can do this from three establishments. You can get preapproved by the bank, by a credit union, or from an online lender. There are pros and cons to all three, but we won’t get into that. What we will get into is how to get preapproved for a car loan.
The right way of buying a new car is to not set foot in the dealership before you get this one over the line. Car dealerships are meant to encourage you to buy more than what you can afford. They will show you leather interior, sunroofs, new rims, etc. Avoid this at all costs as it can be very easy to fall into this trap.
Instead, go to the bank, credit union, or online lender and discuss preapproval. There is one very important reason why preapproval is important. For starters, it tells you how much car you can afford and what limits you can’t go above. Preapproval means the lender going through your finances and determining your spending power. If you have your sights set on that new Chevy Suburban, the lender will tell you if you can afford it or not.
Maybe your spending power is just below the price range of a Suburban. When that’s the case, you might have to settle on the Trailblazer or Blazer. But regardless, get preapproved first before you step into the dealership.
Negotiate With the Dealership
Buying a new car is like a game of poker. Both of you have your hands, and neither will show it too soon. Dealerships are pros when it comes to selling cars. They know how to make you buy more, how to sell you more, and can think of a way to approach the situation by learning more about your hand.
They will likely ask you about trading in an older model or getting a loan from them. This is standard procedure with dealerships, and these questions are designed to help them figure out what you want. While you might think they have your best intentions, always remember that a dealership’s main goal is to sell you more car.
When you enter the dealership, always ask about the price of the car you want to buy. Doing this will give you a good indication of what their hand is. Once you do agree on a price, then talk about that trade-in. As we all know, trading in your older model is a great way to lower the price. But you should only do that once you settle on a price. This negotiation tactic will help you save more. If you tell them about a trade-in before you settle on a price, they will likely lowball or look to rack up interest fees.
Even if you can’t agree on a price and they’re playing hardball, remember that more than one dealership exists out there.
Never Buy Add-Ons
Buying smart means buying affordable. This is the right way to buy a car and everyone should do it. Not only that, but this tactic can save you lots of money when looking to buy a reliable car. Since some carmakers are more reliable than others, it would be wise to examine what reliability features the particular model has.
As always, car makers know their market and know that plenty of people will buy additional equipment. Each of these costs money, with some equipment packages being more expensive than others. Base models should come with the basic safety and reliability features, but that doesn’t mean a particular car maker won’t charge more for what should be a basic feature.
When at the dealership, they will try to sell you these add-ons. While some are indeed great, does it really matter if you get a paint protection warranty? But when it comes to add-ons, these are designed to rack up the price even more. Dealerships make a ton of money out of add-ons so beware. It’s best advised that you buy add-ons from an insurance company, not the dealership. Dealerships often overprice these services and they’re not worth it.